Net Net: Promoting innovation and managing change
Net Net: Promoting innovation and managing change

Trailer Chic For the New Economy


They're alternatives to pitching a tent Occupy Wall Street-style.

Yet, far from the McMansions of the turn of the millennium.

The manufactured home industry is trying to carve a new niche in the market - after missing the housing boom and getting hammered by the financial crisis.

No doubt it will be an uphill battle.

Manufactured home dealers now rank as number one on IBISWorld's list of America's fastest dying industries.

The Manufactured Housing Institute (MHI), which represents the industry, finds the number of factory-built homes sold in the U.S. has declined by 57% over the past five years.

Following recent consolidation in the industry, surviving companies are rebuilding—hoping to cash in on a recovering housing market by building energy efficient homes meeting universal codes.

"Manufactured homes offer quality housing at costs from 10 to 35 percent less than site-built construction. As people continue to see utility costs rise with inflation, they will appreciate the cost savings achievable with energy-efficient manufactured homes," said Cavco Industries Chairman & CEO Joe Stegmayer in a statement.

Phoenix, Arizona-based Cavco is one of the largest producers of HUD (U.S. Department Of Housing and Urban Development)-code manufactured homes in the nation.

There are two types of manufactured homes. Mobile homes must follow HUD-codes. Modular homes must be up to state and local building codes.

Modular homes don't look like the ones you would see in a trailer park circa the 1960s. They're often indistinguishable from houses built from the ground up.

Sheri Koones has written books on the subject. Her latest book is called Prefabulous + Sustainable. She believes the industry has a lot going for it right now.

"Anytime a technology comes along that is able to provide a product that is better quality, lower cost and quicker to market is destined to replace the existing technology, which in home construction has typically been built on-site building," said Koones.

McMansion envy of the early 1990s and 2000s is becoming a distant memory. Downsizing square footage is an emerging trend that is boding well for prefab home builders.

Koones said, "Prefabricated construction is growing in popularity as people have begun to find out that the construction is growing in popularity as people have begun to find out that these methods offer superior quality and shorter construction time, generally at a lower cost than on-site construction."

Even the Oracle of Omaha is betting on the industry. Warren Buffett's Berkshire Hathaway acquired Clayton Homes, a mobile home conglomerate, in 2003. Clayton homes constructs one-and two-story modular and manufactured homes that cost between $20,000 and $130,000.

Stephanie is Squawk Box producer. Follow her on twitter @StephLandsman

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